The Lake Resources share price leapt 18% in October. Here’s what drove the ASX 200 lithium share higher

The Lake Resources NL (ASX: LKE) share price gained a whopping 17.8% in October.

Shares in the ASX lithium stock closed September trading for 90 cents and finished October swapping hands for $1.06 apiece.

That was a considerable outperformance over the S&P/ASX 200 Index (ASX: XJO), which gained a healthy 6% over the month just past. And it was a remarkable turnaround from September, when Lake Resources shares dropped 23%.

Here’s what happened over the month.

What were ASX 200 investors considering in October?

The Lake Resources share price got a big boost on 4 October following the company’s annual general meeting and another lift two days later on 6 October.

That’s when the miner announced a strategic investment and offtake agreement with WMC Energy at its Kachi Project, in Argentina.

The agreement stipulated that WMC Energy take a 10% strategic investment in Lake Resources for $1.20 per share. It provides WMC Energy with 50% of the Kachi Project’s lithium product, up to 25,000 metric tons per annum (mtpa) of battery-grade lithium (LCE).

On 12 October, the Lake Resources share price got another leg up after the miner reported on a separate offtake from Kachi.

The miner announced it had signed a conditional framework agreement (CFA) with lithium SK On for the offtake of up to 25,000 tonnes per annum (tpa) of lithium from Kachi. As with WMC Energy, that’s 50% of the planned production from the project.

It was also reported that SK On would acquire a 10% stake in Lake Resources via the issue of new ordinary shares.

And the Lake Resources share price ended the month on a strong note, gaining 8.1% on 31 October following the release of the company’s quarterly report.

Among the numbers that look to have pleased investors, the explorer reported holding cash and cash equivalents of $159 million as at 30 September. It estimated that was sufficient for more than 14 quarters of funding.

How has the Lake Resources share price performed longer term?

The Lake Resources share price is up a whopping 489% over the past five years. That compares to a gain of 15% posted by the ASX 200 over the same period.

The post The Lake Resources share price leapt 18% in October. Here’s what drove the ASX 200 lithium share higher appeared first on The Motley Fool Australia.

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• Lake Resources share price leaps 10% on ‘excellent early results’
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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